Manufacturers Restore Orders to China After Struggles Elsewhere

Some companies that shifted production out of China to avoid higher U.S. tariffs are restoring orders to Chinese suppliers after finding it difficult to replicate the country’s manufacturing ecosystem elsewhere. Businesses have encountered shortages of skilled labor, specialized equipment, established supplier networks and reliable electricity in alternative hubs, making lower tariffs insufficient to offset higher operating and production costs. Dawang Metals, for example, regained orders from a U.S. agricultural-machinery customer after the company faced production problems in India. The broader “China plus one” strategy remains active, with India, Indonesia, Vietnam and other Southeast Asian countries continuing to attract investment in electronics, automobiles and other industries. Businesses are watching an expected meeting between current President Donald Trump and Chinese President Xi Jinping for possible trade arrangements that could reduce barriers on some non-sensitive goods.